Teddy Awards: A Pat on the Back for Comp Management

Risk & Insurance Magazine has announced the 2008 competition for the Teddy Awards, given to organizations demonstrating a long-term commitment to improving workers compensation performance. Creativity and teamwork are major considerations. Four awards will be given: one for a company; one for a nonprofit or government entity; a third award will honor a federal government entity (that will be interesting!). Finally, a Teddy will be awarded to a small employer--a company or organization with fewer than 500 workers.

As you can probably guess, the award is named in honor of President Theodore Roosevelt, who in 1908 introduced and promoted the first piece of important workers' compensation legislation in the United States. The law, called the Federal Employer's Liability Act, covered workers in hazardous industries and workers for common carriers. In signing the new law, Roosevelt said to Congress "the burden of an accident fell upon the helpless man, his wife and children." With that new law, the federal government took the lead in combating on-the-job injuries, which Roosevelt had characterized as "outrageous." In the years immediately following Roosevelt's initiative, states, beginning with Wisconsin, began to implement their own workers comp laws.

In the interests of full disclosure, the Insider is part of the judging panel for these awards (lively narratives preferred!) But you must hurry: Applications are due by July 15.

Safe Talk, Perilous Walk
Roosevelt may have talked the talk, but when it came to personal risk management, he loved adventure and all-too-frequently put himself in harm's way. There is no better example than the ex-President, after losing a third party bid for office in 1912, heading off to explore an uncharted tributary of the Amazon River, dubbed the "River of Doubt." The trip, plagued by haphazard preparation, the wrong type of canoe and 24/7 perils, very nearly killed him. Candice Millard's well-written story makes for a fascinating summer read. Needless to add, Teddy does not deserve a Teddy for his ill-fated journey.

Health Wonk Review and news roundup

Health Wonk Review - Jaan Sidorov has posted a well-written and very interesting issue of Health Wonk Review at Disease Management Care Blog. Jaan has been a frequent contributor to HWR of late but this is his first time hosting - so when you stop by, be sure to check out his blog, which is billed as "An ongoing forum for information, insights and musings from the world of disease management, the medical home, informatics, pay for performance, primary care, chronic illness and health insurance."

Electronic Medical Records - On Monday, we blogged about Google throwing its hat in the electronic medical records (EMR) field, and today we learn that a major consumer group, insurers, Google, and Microsoft have just agreed to adopt standards to help speed adoption. Congressional lawmakers are also looking at a various bills related to EMR.

Political regime change and health care - Joe Paduda looks at what health care initiatives might look like in a democratic landscape come 2009 and beyond: "While the Dems would love to begin with a huge overhaul of the entire health system, they've learned that doing really big things takes time, consensus, and foundation-building. Instead, the new year will likely start with fixes to current programs and 'corrective action' to address issues of little concern to the Bush Administration."

Industry consolidation - in a $2.1 billion deal, Willis Group agrees to buy Hilb Rogal & Hobbs, locking up Willis' standing as the third largest global brokerage. (Aon and Marsh hold positions one and two, respectively). Does this signal the start of a spate of M&A activity?

9/11 Rescuers: Fools Rush In...?

Anthony DePalma has an interesting analysis of the 10,000 claims against New York City in the aftermath of 9/11. The city has reviewed the claims submitted by people involved in the immediate aftermath and clean up. As many as 30 percent of the claimants are suffering from nothing more than a runny nose or cough. In over 300 of the records, there was no evidence of any illness at all. What's going on?

Nearly seven years after the twin towers collapsed, we are not even close to resolving the fate of the 40,000 individuals who rushed in to help. A quarter of the rescuers have filed claims, but it turns out that many of the filings are incomplete. Alvin Hellerstein, the U. S. District Court judge overseeing the claims, has asked for detailed medical records on all claimants going back to 1995. At this point, literally thousands of documents are missing.

Attorneys for the claimants admit that nearly a third of the filings involve minor or even non-existent problems. But they defend the submissions as a necessary hedge against future illness: even though there are no major symptoms today, debilitating illnesses related to the clean up may develop sometime down the road. The attorneys say that New York law allows a suit if the claimant has "a rational basis" for their fear. Heck, under that standard every single person involved in the clean up could file a claim.

Some of the ailments listed bear no obvious connection to the events of 9/11: deviated septum, multiple sclerosis, high blood sugar, and Bell's Palsy. The attorneys concede that these problems are not likely related in any way to 9/11 and will be dropped. But then again, maybe there was something in the dust...

Second Thoughts in Catastrophic Moments?
New York City is struggling with a monumental liability in the aftermath of 9/11. As a result of the failure to require rescuers to wear breathing masks (remember Rudy Giuliani's maskless photo op on a pile of rubble?), the city faces charges of negligence that may exceed $1 billion. From day one there have been complex problems in establishing a relationship between 9/11 and subsequent illnesses; these problems are now likely to stretch more than a decade beyond the event itself.

My concerns are not so much retrospective - the individual claims stemming from 9/11 will be determined on a grueling, case-by-case basis. But what happens the next time catastrophe strikes - be it terrorist attack, earth quake, hurricane or meteor from outer space? Humans tend to respond instinctually, rushing in to help those in need. The events of 9/11 have created a cloud of doubt as thick as the one raised by the collapsing towers. Going forward, rescuers may and perhaps should ask themselves, "Will I be protected? Will my family be provided for if my rescue work harms me? Have the people in control - even in the context of unimaginable disaster - set up reasonable risk parameters for my entering the damaged area?"

My guess is that we have learned a few things about risk management in the months and years following 9/11, but we still fall far short of readiness. One thing is certain: we cannot have first responders worried about their own health and the well-being of their families. Yes, "fools rush in where angels fear to tread." But rational human beings (some politicians excluded?) are not fools. We have all seen the inordinate delays, the complex arguments and the sheer passage of time as the legal system struggles with compensability for 9/11 rescuers. Setting aside the marginal claims, which probably deserve their current fate, the legal system must be able to protect courageous responders in a timely manner. Someday, alas, they will be needed again.

Injured and Illegal...in South Korea

We sometimes forget that the USA is not the only country with an undocumented worker problem. Anywhere you find developed countries with lots of (relatively high paying) jobs, you will find people willing to do anything to get them. Which leads us to an article in Korea Times by Park Si-soo.

Zhang Shuai, 22, entered South Korea on a student visa in March of 2005. He took a language course at a nearby university, but he also began working (illegally) at an electronics firm in a neighboring city. In May 2006, immigration officials raided the building (shades of last year's ICE raids in New Bedford). His employer told Zhang to skedaddle pronto (using, of course, the Korean equivalent). During his flight, he accidentally fell from the building, suffering brain damage and paralysis in his left arm and leg.

Zhang filed for the South Korean equivalent of workers comp benefits. His initial petition was denied, because "his escape had nothing to do with his duties at work." But the Busan High Court has granted Zhang compensation for his injuries. The court is able to connect the dots between Zhang's job duties and his escape attempt (please excuse the rather byzantine grammar, a product, perhaps, of hasty translation):

His escape attempt was to avoid many disadvantages that he would receive after the inspection, but it is also true that his employers forced him to escape so as to continue their operations because they were not able to find local workers despite repeated recruitment advertisements. Therefore, the escape was part of his duties at work.

There are several seemingly universal principles here: people will gravitate to available work with minimal consideration of national boundaries or workrules; undocumented workers will be injured on the job with the same or higher frequency of regular workers; in most instances, undocumented workers will be eligible for workers comp or its equivalent.

We have an undocumented worker problem in this country of humongous proportions, but we are by no means alone. Perhaps the United Nations could come up with a solution that attacks this problem not just in the US, but across the entire world. Just kidding. That would imply a rational and universal approach to shared problems. No way, Jose! It is far more likely that undocumented workers will continue to break the rules and continue to do the work, country by country, across the face of the earth.

Google throws its hat into the electronic medical records arena

Search behemoth Google is making its initial foray into the electronic medical records (EMR) business with the recent launch of Google Health. (Also see the FAQs). This service goes toe-to-toe with Microsoft's Health Vault in the race to become the web's dominant player. Some large health plans such as Kaiser Permananete have been rolling out EMR programs to members. And a single medical record digital system that was implemented by the military a year ago is improving care and eliciting favorable reviews from patients.

A single, portable, user-controlled medical record that is available online offers many potential benefits. People would have medical information such as diagnoses, lab reports, and prescriptions downloadable from providers in a single record that would be accessible anytime and anywhere. Single records will create efficiencies and eliminate duplications. Plus, a host of other user-controlled benefits would follow, such as medication management that would screen for potentially harmful interactions, an alert system for scheduling tests or screenings, and even device connections that would allow electronic readings of such things as blood pressure and sugar monitors. It would be much easier for consumers to manage their health care, particularly for complex conditions.

But there are impediments, a primary one being physician adoption. Fewer than one out of every five doctors are using computerized patient records, according to a recent report in the The New England Journal of Medicine (see NYT: Most Doctors Aren’t Using Electronic Health Records.) The study reports that the physicians who are using electronic records report many advantages: 82 percent said they improved the quality of clinical decisions, 86 percent said they helped in avoiding medication errors and 85 percent said they improved the delivery of preventative care. For those who haven't moved to computerized records, the initial cost and disatisfaction with available products were cited as barriers.

Among consumers, privacy is front and center as a barrier to adoption. Scare stories abound. Consumers fear medical record theft and fraud, data mining by insurers and providers, and leaks of sensitive medical data to inappropriate parties such as employers. Of course, such security breaches can happen offline, too, but the ability to search data adds an additional layer of concern. Consumers want legal protections, including the ability to control who sees what. Services like Google and HealthVault have plans to keep controls with the consumer, but the public may be skeptical given the many security breaches that have occurred with identity fraud. Problems or not, the trend is clear so keep alert for developments on this front. A new Medicare pilot program by Health and Human Services aims to offer physicians incentives that will lower the cost barrier and hasten adoption rates.

Brendan Doyle: Return-to-Work Person of the Year

You probably have never heard of Brendan Doyle, a Rhode Island state trooper, but his story, as told by Amanda Milkovits in the Providence Journal, belongs in the hearts and minds of anyone involved in disability management. He exemplifies what great medicine, combined with ferocious determination and discipline, can accomplish.

Just over a year ago, he was punched to the ground by a low life named James Proulx, hitting his head on the pavement. His injuries were so severe, doctors discussed organ donation with his family. He was comatose, hooked up to a respirator, his skull shattered.

But he held on. Eventually, he was moved to Spaulding Rehabilitation Center in Boston, where doctors dismissed any notion that he would be able to return to work. He was paralyzed on his right side and suffered from double vision. But by the fall of last year, after doctors reattached a piece of his skull, Doyle noticed that his fine motor skills started to return. The double vision disappeared and he regained feeling and mobility in his right side.

Against All Odds
By this past spring, Doyle said he wanted to return to his job as a trooper: not a modified duty, desk job in the back of some precinct, but full duty. His supervisors, who supported him from day one, put him through rigorous retraining in firearms, pursuit driving, use of force techniques and through "shoot - don't shoot" scenarios to test his reaction times. He endured the standard three week course of 13 hour days in the police academy. He passed every test with flying colors, even earning a master pin for firearms.

So against all odds, with no small element of luck, Brendan Doyle is back on the job. From the beginning of his ordeal, this was his one goal. By all rights he should have become permanently and totally disabled, drawing 100 percent of his trooper pay tax free for the rest of his life. No one would have questioned it. But Doyle refused to bow to this fate. In doing so, he exemplifies what the human spirit can accomplish despite ridiculous odds.

I would like to see a picture of Doyle, with his humble smile and crescent moon-shaped scar, posted over the desk of every ER and occupational doctor, every nurse case manager and claims adjuster - and every employer - to remind us that the goal of treatment for injured workers is return to full duty. Forget the odds. Look beyond the trauma of the incident itself and the dire prognosis. Anyone seeing Doyle in the days and weeks following his injury would have scoffed at the notion that he would ever be in uniform again. But that is exactly where he is today.

I hope never to meet Trooper Brendan Doyle: to do so would probably mean I was involved in an accident or going a little too fast on I-95 outside of Providence. Nevertheless, I will try to keep his image in mind. For all of us who work in risk management, cost control and safety, who focus on doing the right thing for injured workers, Trooper Doyle embodies the spirit and goal of our work. He is the Insider's Return-to-Work Person of the Year.

Looking for Fraud...In the Mirror

Imagine you are an attorney in Massachusetts looking for a little work. The Office of Labor and Workforce Development (OLWD), a state agency, hires you and 10 other attorneys to examine applications for unemployment insurance. Normally, this work would be performed by state employees, but the combination of cost-efficiency lay offs and a bad economy has caused a surge in applications. The state pays you through a 1099 form. You are responsible for your own taxes. And you soon find yourself in the middle of a story concocted by Franz Kafka.

In a parallel operation (bordering on a parallel universe), Governor Deval Patrick has announced a crackdown on employers who commit fraud by misclassifying workers to avoid paying workers comp insurance, plus state and federal taxes. The governor creates an Underground Economy Task Force to ferret out abuses of the independent contractor designation. The task force resides...in the OLWD. (You can read the AFL-CIO's endorsement of the task force here.)

These two worlds collided when someone (presumably a state employee affiliated with the unions who lost employees in lay offs) dropped a dime on OLWD, complaining that the 11 attorneys hired as "independent contractors" were performing the job duties of regular employees. So now OLWD is being scrutinized by its own task force. We can only hope that members of the task force are state employees, and not "independent contractors" who have signed on to carry out a short-term project: an image arises of a dog furiously pursuing its own tail.

Management Conumdrum
Many employers face the conundrum embodied in this situation: when you have more work than you can handle - especially on a short-term basis - it's convenient to hire temporary "independent contractor" consultants to carry out the work. Hiring is much easier; there are no long term commitments. When the work has been completed, you simply terminate the contracts.

Because there is such widespread abuse of the "independent contractor" designation (did someone say "FedEX"?), these convenient arrangements are now routinely challenged. At OLWD, the questioners themselves have been called into question.

Suzanne Bump, the state's secretary of Labor and Workforce Development, is not using the word "investigation" to characterize her examination of this particular form of outsourcing. She points out that the practice began in the prior (Republican) adminstration, which had enthusiastically reduced the size of the state's workforce, only to discover they did not have enough people to do the necessary work.

"We are taking steps to reverse this practice and are looking to hire more review examiners on a permanent basis when possible," Bump stated. This in itself raises a problem: by creating regular, full-time positions to handle the jobs, the state will have to grow the budget. Regular employees cost more than "independent contractors" because you have to pay for insurance and taxes (which is one of the reasons they hired independent contractors in the first place).

What used to be routine HR functions have become enormously complicated. I am sympathetic to all employers who have to work through these often paradoxical issues. When it comes to managing a business in these challenging times, we find ourselves lost in a dimly lit, endless corridor, characters in a Kafka story, looking for the room where all the answers are rumored to reside. Like the good folks at OLWD, we eventually conclude that the room does not exist.

Weekly carnival - A lively edition of Cavalcade of Risk has been posted by Jim at Bargaineering.

NH targeting misclassified employees - New Hampshire employers take note: The departments of labor, employment security, insurance and revenue are teaming up to ferret out employers who misclassify workers as independent contractors to avoid paying workers compensation and unemployment insurance. In addition to potential criminal penalties, various state agencies may impose hefty fines and penalties.

WV: open for business - West Virginia's transition from a private state fund to an open market will enter its final phase on July 1 when WV opens to competition. A total of 150 companies have filed the rates and forms required to offer workers' comp insurance, including 25 companies that were not previously licensed in the state.

New York Trusts, Revisited: Comp Board Channels Willie Sutton

Yesterday we blogged the New York Workers Comp Board's unusual solution to a cash flow problem: when a dozen trust funds collapsed, the Board decided to hit up the remaining, solvent funds with an assessment: they raised assessments from the routine total of $500,000 to a staggering $12 million. The Board is using the logic of notorious bank robber Willie Sutton, who famously said that he robbed banks because "that's where the money is." In this case, the Board is hammering the people who paid their full premiums and whose administrators abided by the rules, simply because they have the money. The board has transformed the "several liability" of independent trusts into a gerry-built "joint liability." While their motives are good - benefits to injured workers must be paid - their method is patently unfair.

In their press release, the Board pats itself on the back for forcing the third party administrator, CRM, out of business in New York. Here are the terms of the settlement:
- CRM surrenders its TPA license no later than September 8, 2008, and ceases representing self-insured employers and carriers before the Board;
- CRM transfers to the Board all claims, as well as the responsibility for the administration of all such claims, for all of the group self-insured trusts that it still administers; and
- CRM assists in the well-ordered and timely transfer to the Board of all claim files, documents, information, and funds associated with the trusts.

"The Board sought to revoke CRM's license and today's agreement accomplishes just that," said New York State Workers' Compensation Board Chair Zachary Weiss. "This result speaks volumes about both the strength and validity of the charges the Board brought against CRM. It also sends the strong message that we will vigorously safeguard the well-being of honest business and injured workers."

The results may speak volumes, but not necessarily in the manner Weiss intends: yes, the charges obviously had merit; yes, it's important to shut down CRM's operation. But what about accountability? According to an unidentified spokesman, CRM has admitted no violations and paid no fines or penalties. Despite the apparent deliberate misrepresentation of actual losses, despite paying their own executives inflated salaries, despite creating this entire mess, CRM just walks away. For the moment at least, they are off the hook, while the solvent trusts who played by the rules are required to dig deep into their own pockets.

Eventually, when the forensic audits have been completed, members of the failed trusts will probably receive retroactive bills for underpaid premiums. Then it will be their turn to howl. When and if that happens, the Board has promised to refund the humongous assessments placed (unfairly) on the solvent trusts. That is not very reassuring to innocent bystanders facing immediate bills for someone else's problem. My guess is that the Board will run up against the same problem as Willie Sutton: the money might be there (in the trusts), but that does not make it right to take it. Through attorney Richard Honen, the solvent trusts have filed suit to end this ill-conceived bailout. In the interests of fair play, here's hoping they find a sympathetic judge.

Risky Risk Management in New York

Compensation Risk Management (CRM) is a third party administrator for eight workers comp trusts in New York. These trusts offer comp coverage to affinity groups in the areas of health care, wholesale/retail and transportation. As we read in the New York Times in an article by Steven Greenhouse, there is good news and bad news about CRM: the good news is that CRM offered low cost premiums to members and high rates of reimbursement to its own executives. The bad news is that the reserves in the the trusts were woefully inadequate. In one of the trusts, reserves fell from 90 percent to 40 percent of liabilities in just a few months.

Trusts have long offered a major alternative to (expensive) conventional insurance for New York employers. About 35 percent of the state's businesses are self insured for comp, with one fifth of those participating in trusts. The really bad news in CRM's collapse is that other, healthy trusts may have to pick up at least part of the tab for CRM's poor management. The workers comp board has ordered that the state's 50 healthy trusts pay emergency assessments totaling tens of millions of dollars. As you might imagine, they are not thrilled to be doing this. In fact, they have sued the board, saying that it has no right to force them to contribute. At this point, they have been granted injunctive relief.

State officials believe that a $200 million emergency fund will be needed to finance the statutory benefits of thousands of injured workers covered by 12 failing trusts. So ultimately, the taxpayers will have to make up for CRM's management deficiencies.

The Company Line
Eric Egeland, a CRM VP, said that the problems were caused by an unexpected increase in workers comp liabilities and fast-rising medical costs. (Gee, Eric, that's why you have actuaries!) He said the eight trusts could not increase reserves fast enough in response to their increased liabilities because of recent state-ordered cuts in comp premiums. (I don't think so, Eric. If you set reserves properly, a cut in rates will not present any unusual problems.)

If you peruse the long list of executives at the company website, you begin with the CEO, Daniel Hickey, who is described this way: "At age 22, he attended the Aetna Institute, the nation’s top property and casualty training program, and received the coveted Gold Ribbon for excellence in sales presentation." Note that the gold ribbon is for sales. He might have been better off shooting for a gold ribbon in management.

CRM's management of their comp business is now under intense scrutiny. Too little, too late. The artificially low premiums pleased their participants, but these deflated premiums simply masked inadequate reserves. The risk managers took far too many risks. Now, as usual, those who played by the rules will have to pick up the tab.

Jane Hiebert White has posted a great edition of Health Wonk Review: Washington Week at Health Affairs - and she notes that this issue coincides with Academy Health's Annual Research Meeting held in DC this past week, a gathering based on the concept that health policy should be informed by research. In this HWR issue, one of the major themes centers on health care reform. It's worth your time to check it out - it may be one of our biggest and most substantive issues yet.

Survival story - at the beginning of the year, we posted about miracle survivor Alcides Moreno who lived through a NY scaffolding collapse which sent him plummeting 47 stories. Today, the New York Post features a story about Moreno entitled 47-story guy walking tall. But not all the news associated with this story is good: his brother who was also on the scaffold was killed in the fall. Earlier this week, The New York Times covered the OSHA report about the accident, which found fault with City Wide Window Cleaning, the service that employed the Morenos, and Tractel, the firm that had repaired the scaffold.

OSHA issued five citations against City Wide for what it called serious violations. Three carried proposed fines of $7,000 apiece, the highest the agency can impose. One was for lack of a system to protect against falls — cables that would have left the Morenos dangling at the top of the building when the scaffold gave way.

Another citation against City Wide was for failing to train employees in how to inspect the scaffold, and for not training them to wear "personal protective equipment" before they stepped onto the rig.

The article lists other charges against both companies. Commenting about the fines imposed, the Daily News editorializes that death comes cheap, noting that, "Financial penalties like that are meaningless as a deterrent to corner-cutting by contractors."

Hand injury prevention - According to an article on hand injuries by Don Groce in Occupational Hazards, gloves can prevent injuries and reduce costs. Recent research shows that "The cost of hand injuries in just one sector of the construction industry is six times what it would cost those employers to offer every employee appropriate hand protection." This preventive measure represents potential to reduce pain, reduce lost productivity, and save dollars. According to the CDC, hand injuries account for more than a million emergency department visits by U.S. workers per year. Groce's article also discusses advances in glove manufacturing and various types of safety glove alternatives.

Dupont cancer cluster? - Celeste Monforton of The Pump Handle raises the question of whether there is a cancer cluster associated with Dupont in response to 19 cases of rare carcinoid tumors among DuPont employees, with 6 of the cases surfacing among workers at the Washington Works plant in West Virginia. She reports that adverse health effects have been associated with exposure to perfluorooctanoic acid (PFOA or C8), the chemical used to make Teflon and other non-stick surfaces.

Footnote on a Fatality

Yesterday we blogged the death of Lauro Ortega, who was crushed while excavating a building site in New York. We assumed that he was protected by workers comp, even as his lawyer pursued more lucrative remedies from the (recently indicted) employer, William Lattarulo. It appears that we were just a bit naive. Ortega was an illegal immigrant, working construction jobs on a cash-only basis. He labored long hours, six days a week, sending most of his earnings home to his family in Cuenca, Ecuador.

"He came to this country to work. He liked to do it. That was his love," his brother is quoted as saying. Ortega lived in a tiny apartment by himself; he spoke to his wife and children every day. He had very little life outside of work, with Sundays reserved for church. He would have preferred to stay in Ecuador, but there was no work available. He came to this country for one simple reason: it's where the jobs - and the money - are.

There will be readers who lack sympathy for Ortega. He was here illegally. He was paid under the table. He took his chances and reaped a harsh reward. At best, he is viewed with considerable ambiguity: he was here illegally, but to some degree our laws still protect him as a worker. His family will receive some compensation for his untimely death: either in the form of workers compensation (presumably paid out of the state fund) or tort liability stemming from his employer's negligence. It will take some time, but eventually his family will receive financial support simply because Ortega died at work in America.

I am struck by the quiet desperation that brought Ortega to New York. I am impressed by his willingness to work hard, every day, and use his earnings to support a wife and two children back home. I am saddened by his sudden and very unnecessary death. And I am frustrated by the stalemate in Congress, which has been unable to construct a reasonable and just solution to what has become an intractable problem of enormous magnitude. There are over 12 million workers like Ortega, all of whom are here illegally and most of whom are working hard and doing jobs that need to be done.

Yes, they are illegal. And yes, we need their services. Two simple, contradictory facts. What, if anything, are we going to do about it?

Employers as Criminals

William Lattarulo owns several buildings and vacant lots in Brooklyn NY. Back in March, his workers were digging a foundation for a commercial laundry at 791 Glenmore Ave, when a more experienced contractor warned Lattarulo of an immediate hazard: the excavation had reached a level below the foundation of the adjacent building. He advised Latturo to install underpins to make the excavation site more stable.

Instead of stopping the work, Lattarulo ordered his employees to keep digging. Moments later, the wall of the adjacent building collapsed, crushing Louro Ortega, a 30 year old laborer who had been on the job just two days.

"I don't think I killed that kid," Lattarulo is quoted as saying. "They're just looking for someone to blame for all this" (an apparent reference to the spate of construction-related fatalities in the city).

The attorney for Ortega, Kenneth Halperin, says the accident never should have happened. "They failed to make sure the foundation wall was stable. No one checked anything."

In the New York minute it took to snuff out the life of Louro Ortega, Mr. Lattarulo went from entrepreneur to defendant. He has been charged with manslaughter. Even if he is successful in avoiding jail time, he faces long and expensive days in court, trying to defend himself against charges of negligence.

Beyond Exclusive Remedy
Under most circumstances, workers comp offers the only recourse for a deceased employee and his family. Comp is an exclusive remedy. As we have blogged in the past, "substantial certainty" that an injury would occur is one of the factors that can help victims pierce the exclusive remedy shield. Lattarulo's actions appear to be so egregious, so likely to result in bodily harm, the doors to tort liability have been thrown wide open.

For the time being, workers comp will cover the cost of Ortega's funeral and provide his wife and two children with some modest level of support. Attorney Halperin will certainly not be content with that. He will pursue the big bucks that accompany criminal negligence. Mr. Lattarulo is about to learn that business owners can be held accountable for what in retrospect was an ad hoc and hasty decision. He thought he was just digging a hole for a new building. Through his dismal judgment, he dug a grave for an innocent worker and inadvertantly buried his own modest ambitions in the same rubble.

Driving and flash floods

Flash flooding (video) in the central states over the last few days has resulted in numerous deaths. With "ordinary" flooding, there is a build up over time from rain or melting snow as rivers and bodies of water overflow their banks. Weather authorities and media have time to issue public alerts. But flash flooding is the rapid and extreme flow of water that occurs unexpectedly. It usually occurs within a few hours of a rain event. Flash flooding can often happen when a dam, levee, or embankment gives way or when an unusually heavy torrential rainfall occurs quickly. While some areas are prone to flash flooding, flash floods can occur unexpectedly almost anywhere given the right confluence of conditions.

Flooding can occur in any of the 50 states or U.S. territories at anytime of the year

National Oceanic and Atmospheric Administration (NOAA) and the National Weather Service have embarked on an ongoing public education campaign which encourages people to Turn Around - Don't Drown. Ironically, many victims who die in flood-related conditions do so because they are in a hurry to get home to safety! Here are some precautionary tips:

Be aware of and avoid areas on your way to and from work and home that are subject to flooding in heavy rain conditions.

Monitor weather conditions through NOAA or reliable news radio.

If you come upon roads or walkways covered with water, the depth of the water or the condition of the road underneath cannot be adequately assessed. Don't drive or walk through water - turn around and find another route.

Don't drive around barricades.

Be particularly alert at night.

If a vehicle stalls in water, leave it immediately and move to higher ground. Many vehicles are swept away, greatly increasing the danger for occupants.

How employers can help
Research demonstrates that those who take flash flood warnings seriously and have knowledge about the associated risks are less inclined to attempt to drive through water than those who don't. Public education which emphasizes the seriousness of flash flood warnings and safe driving behavior can save lives. Employers can:

Know if your workplace is located in a high-risk area for flash flooding

Communicate flood warnings to workers, particularly at times when people are commuting to or from work

Help to raise awareness about the dangers of driving in flood conditions. (We've compiled some resources, below)

Equip your outdoor workers and frequent drivers with safety and prevention tips for weather-related hazards, including hot and cold weather hazards, and safety tips for working or driving in snow and ice, electrical storms, and flooded areas or flash floods

There Goes the Judge

Back in November we blogged the saga of Judge Robert Restaino, a City Court judge in Niagra Falls NY. He apparently was having a terrible, horrible, no good, very bad day on March 11, 2005, when a cell phone went off in his courtroom, in violation of his judicial protocols. When no one fessed up to the crime, he jailed 46 people, most of whom had been waiting for disposition of domestic violence cases.

At the time of our first blog, New York's judicial oversight commission had voted 9 to 1 to fire Restaino. He appealed. Now the State Court of Appeals, with a vote of 6 to 0 with one abstention, has upheld the termination. The Appeals Justices said they have "serious doubts that this breach in trust is reparable."

Restaino is not without his supporters (two wrote in to comment on our original posting). It appears that his work, prior to this incident, was satisfactory. Niagra Falls District Attorney Michael Violante (excellent name for a DA!) was disappointed in the outcome. "He had a bad day and it's cost him the bench...I think that it's very unfair, frankly." Even one of the judge's critics, David Jay, a Buffalo civil rights attorney, thinks the outcome was too harsh. He believes that the courts need a disciplinary option between the extremes of dismissal and censure.

Aaron Besecker, author of the article in the Buffalo News, points out that at the time of the incident, Judge Restaino did not have a cell phone. Now that he is out of a job (and a comfortable salary of $113,900), he might want to invest in one. You always want to be accessible when someone calls with a lucrative job offer.

A Tree Falls in Rhode Island

We have been following the case of Edgar Valasquez, the undocumented worker who was seriously injured by a chain saw in 2006. (Our two prior blogs are here and here.) His employer, Billy G's Tree Service, failed to carry workers comp insurance. When Edgar showed up at the courthouse for his comp hearing, federal agents (apparently tipped off by Billy G) arrested and deported him.

The story appeared to have a reasonably happy ending. With a lot of community support, Edgar secured a temporary visa to plead his case. He was supposed to receive a $30,000 settlement. Now Billy Gorman has fired his attorney, Michael St. Pierre, claiming he never agreed to the deal. St. Pierre says he sent Gorman three "very detailed" letters specifying the settlement's terms. (After working with the recalcitrant Gorman, St. Pierre has earned his sainthood!)

The settlement involves 10 monthly payments of $300 per month, for 30 years. Because he failed to carry insurance, Billy himself was on the hook for the payments. That's a lot of tree trimming. Meanwhile, Edgar's lawyer, Maureen Gemma, thinks the settlement was too easy on Billy: too small an amount, paid out over too long a period of time. She will undoubtedly take advantage of Billy's balk to up the ante.

Gemma reports that Edgar, back home in Mexico, is "patient as always. He's just a good person." Probably not the way anyone would describe his former boss.

This all brings to mind the query, "If a tree falls in the forest and no one hears it, does it make a sound?" A tree has fallen in Rhode Island, felled by Billy G. and his crew. A lot of people heard it and are still listening, as the sound reverberates through dusty halls of the workers comp system.

Congratulations to Hank Stern of InsureBlog on the the second anniversary of Cavalcade of Risk - check out some of the best of the web's risk management posts from the last few weeks. Kudos to Hank for keeping this biweekly "best of" carnival going - it's a great way to be introduced to new blogs.

Disease mongering - HealthLawProf Blog features an interesting item on the topic of disease mongering, defined as "the selling of sickness that widens the boundaries of illness in order to grow markets for those who sell and deliver treatments" or the corporate-sponsored creation of a disease. Apparently, this is an area of increasing concern in global public health circles.

Claims adjusting as a commodity - Joe Paduda at Managed Care Matters has a good post on high claims caseloads and why they should be important to an employer. Joe warns that employers who buy claims adjusting services on the cheap get what they pay for. A veteran claims adjuster adds remarks about how the profession is changing in the comments.

"It’s a very sorry state of affairs for our national worker safety and health protection program when you have a representative committee of crane safety users and manufacturers who put together a CONSENSUS regulatory text to vastly improve protections for workers and the public, and the responsible agency can’t maneuver it through the bowels of the Department of Labor. This is really pathetic."

Subrogation - In a recent subrogation case, the Massachusetts Supreme Court denied a suit by a company seeking to collect the increased cost of workers compensation from a third party. R.L. Whipple successfully recovered money for medical and wage replacement benefits that it paid to an employee who was injured when a dumpster owned by Pondview Excavation Corporation rolled off a truck. Whipple also sued Pondview for negligence to recoup a dividend that it lost from its insurer, as well as to cover the increases in the cost of workers compensation insurance it incurred in the wake of the injury claim. The Court denied this suit following the traditional rule "that purely economic losses are unrecoverable in tort ... actions in the absence of personal injury or property damage."

Heat stress - Some 4,000 Americans die each year from heatstroke, and many more are made ill from heat-related illnesses. BLR Safety Daily Advisor offers 6 ways to prevent heat stress at work.

Teen worker injuries - As a follow-up to our recent post on teen worker injuries, we recently found this report from Minnesota on teen worker injuries from 2003-2005 (PDF), which breaks down data on the most common industries for teen injuries, common injury characteristics, and the most common type of injuries. The five highest occupations for teen injuries by percent of claims were: food preparing and serving (21%), laborers/material movers (16%), health care support (10%), construction (9%), and production/assembly (8%).

Setting Limits in California

California had a long-standing reputation as a workers compensation nightmare: not because injured employees received generous benefits - they did not - but because doctors and lawyers exploited the system to generate enormous fees. Governor Schwarzenegger, AKA the Terminator, put an end to that with his extensive 2003-04 reforms. In the effort to contain costs, the reforms for the first time brought managed care tools into the comp system. The bottom line for employers has improved dramatically.

Among the many provisions of the reform was a limit on physical and occupational therapy treatments for an injury. Injured workers are now limited to 24 visits. Jose Facundo-Guerrero, a worker at a nursery in Half Moon Bay, challenged the limits on constitutinal grounds, alleging that he was entitled to the "full provision for such medical, surgical, hospital and other remedial treatment" promised in the CA Constitution. Jose had visited his chiropractor 76 times and he wanted the carrier to pay.

The First District Court of Appeal in San Francisco has upheld the limits in the comp reform package. They found that the Constitution does not require "unlimited" treatments and leaves the details up to the legislature.

Arbitrary Limits
There is no question that the 24 visit limit is arbitrary. This one size does not fit all. On the other hand, chiropractic treatment can be addicting. It feels good. Jose went 76 times and might well have continued on indefinitely, had the treatments been compensable.

One aspect of the reform language caught my eye: the 24 visit limit can be exceeded if the employer agrees. This raises an intriguing possibility. If valued employees require extensive physical therapy that goes beyond the arbitrary limit, enlightened employers might well authorize the carrier to cover a specific number of additional visits. This makes sense as long as it keeps the employee happy and productive.

As with so many workers comp issues, law makers struggle to find the middle ground between no limits and severely curtailed treatments. What's missing is reliable and effective lines of communication among employers, their employees, medical providers and insurance carriers. The rigid limits on treatment in California are apparently legal, but that does not mean they are fair. There is no question that the reforms of 2003-04 have reduced costs. Ironically, injured workers were not the primary beneficiaries of the state's pre-reform, out-of-control comp system. And it now appears likely that these same workers will pay the price for reforms as well.

Firefighters revisited: Presumption's Slippery Slope

In yesterday's blog, my colleague Julie Ferguson discussed the issue of compensible illness for firefighters. Forty states already have statutes giving the benefit of the doubt to firefighters: if they become ill from many forms of cancer or heart disease, the illness is presumed to be work related. The burden of proof (and "burden" is surely the operative term) falls to the municipality to prove that the illness is not work related. Nevada has taken it a step further: in the police department, any heart attack is considered work related, with no consideration of personal habits (smoking, overweight, high fat diet) or family history. That is a very generous - and potentially expensive - public policy.

As with any medical issues, you have to examine the evidence. Where it can be demonstrated that specific occupational exposures lead to specific illnesses, a basis for presumption is established. That is a fundamental of evidence based medicine. But as a matter of public policy, it is extremely hazardous to build presumption into the comp statutes. There are many forms of cancer. There are many risk factors for heart disease. By establishing a presumption that virtually any illness related to these dreaded diseases is work related, state and local governments are exposed to an enormous - and open-ended - liability. To be sure, there is always a risk that a deserving firefighter might have to undergo lengthy litigation to prove his or her illness is work related. But that process - universal in the comp system - is the necessary price we pay for participating in comp's unique disability coverage. As much as I admire the public service contributions of police and fire personnel, I believe that they should operate under the the same rules that cover all employees: their illnesses are compensable if they are demonstrably work related. In most instances, this requires a case by case review.

Follow the Money
The issue here is not medical treatment: these illnesses, if determined to be unrelated to work, would be covered under conventional health insurance. (To be sure, it's cheaper for the claimant to be treated under the comp system, as there are never any co-pays or deductibles.) As is often the case with comp, the real issue is indemnity. For firefighters, that usually means wage replacement that is 100% of their usual pay, tax free. In other words, a firefighter on workers comp makes more than one on active duty. When you combine a presumption of compensability with an already generous indemnity benefit, you have created a bitter and expensive cocktail (with state and local taxpayers picking up the tab).

Virtually all municipalities operate under a "zero sum" budget, where increased expenditures in one area (expanded coverage for illnesses under comp) become a net subtraction in another (municipal services, public safety, schools, water supplies, etc.). It may seem politically expedient to speed compensability for some of our most valued local employees (police and fire), but governments do this at great risk to the bottom line, not to mention reducing all other valued municipal employees (city workers, teachers, public works) to second class citizens.

In a word, a presumption of compensibility is a slippery slope toward budget chaos. We have an obligation to protect our public protectors. But offering presumptive comp coverage for virtually any illness is an invitation to fiscal ruin.

Firefighters and presumptive disability statutes

Sally Roberts has written a good article on firefighters and state workers comp laws in the recent edition of Business Insurance. Regardless of profession, illnesses have traditionally posed more of a compensability challenge than an out-and-out injury. When someone suffers an injury, it is generally a discrete event so matters are usually black and white as to compensability. Because illnesses are progressive, it can be more difficult to associate them with a work exposure - particularly illnesses like cancer that might have other contributing life factors. For most professions and in most states, the burden of proof is on the employee to demonstrate the work-relatedness of an illness. But as Roberts notes in her article, more than 40 states have some type of presumptive disability statutes for firefighters. According to the International Association of Firefighters, this means that the burden of proof shifts from the employee having to prove that the illness is work related to the employer having to prove that the illness is not work related. In most states the presumption is rebuttable, but in some states it is not.

Proponents point to studies documenting that firefighters are at heightened risk of certain diseases and illnesses, such as infectious disease, heart disease, lung disease, and cancer. Opponents see presumptive laws as favoring one class of workers over another. Plus, opponents also cite the cost and inefficiency of treating medical conditions under the workers comp system, which has rudimentary managed care in comparison to the group health system.

It's a sticky dilemma. Putting the burden of proof to establish the work-relatedness of an illness on the employee often seems to be an unfairly high hurdle for certain high-risk, high-exposure professions; employers face a similarly high hurdle in trying to establish proof that an illness is not work related. Firefighters are exposed to danger and toxins as a part of their normal work conditions. Determining whether the job exposure or a nightly diet of hamburgers was the cause of a heart condition is work for a Solomon. Establishing which exposures are work-related and which are more likely due to ordinary life circumstances is near impossible. This seems to be a good test area for the "24-hour coverage" concept. Perhaps high risk, essential service public personnel such as firefighters and police need to be treated more like the military in terms of being afforded comprehensive medical care for both on- and off-the-job injuries and illnesses.